Luxury Island Escape Cruises NZ collapse leaves customers $4 million out of pocket, Broome WA
Cruise line collapses, leaving customers with $4.6 million despite selling luxury ship to pay debt
- Cruise company went bankrupt last year
- Island Escape Cruises NZ ship sold
- Customers will still lose $4 million
A luxury cruise line has gone into receivership, leaving customers with $4 million out of pocket despite the forced sale of the operator’s main ship to repay debtors.
The sudden collapse of Luxury Island Escape Cruises NZ last July means dozens of passengers are denied compensation after shelling out $15,000 each to sail 12 nights out of Broome and up the Western Australian coastline.
A creditors’ report shows that despite the dramatic seizure of a Luxury Island Escape Cruises NZ vessel in Broome harbor to pay international financiers, that sell-off yielded a disappointing amount.
The 53.5-meter, 30-passenger luxury cruiser Island Escape, which comes with a helipad, was “arrested” by Federal Court last August and seized in November.
Despite similar vessels selling for $35 million on the international market, the Island Escape only grossed $5.5 million.
Luxury Island Escape Cruises NZ, which operated this ship for voyages along the north coast of WA, suddenly went bankrupt last year
The private pearling company the Paspaley Group took over the purchase on January 13 and took possession of the ship on February 22.
Liquidators Rowan John Chapman and Amanda-Jane Atkins of Chapman Atkins Limited reported that the price fell far short of the nearly $20 million owed to Export Finance Norway and the Bank of New Zealand.
The company also owes $4,677,217 to customers who didn’t get their cruises, but the liquidators warned it would not be refunded.
“Given the funding shortfall, no distribution will be made to unsecured creditors, including the company’s cruise ship customers,” their report reads.
Steven Davies and his wife Lyn paid $23,000 for their Kimberley cruise, only to be bitterly disappointed.
3.5-meter luxury cruiser Island Escape for 30 passengers was sold to pay debts to international financiers
‘It was a trip of a lifetime that both of us have always wanted to do,’ said Mr Davies the ABC.
“We thought we’d get our money back and book somewhere else,” he said.
Despite the setback, Mr. Davies and his wife still hope to take a Kimberley cruise, but they now have health concerns.
Mr Davies revealed that he had been diagnosed with cancer but hoped he had ‘came through the worst’.
“I’m due for a PET scan in about 10 weeks and if that all comes out clear then we’ll definitely look into getting the Kimberley done by a company with a better reputation,” he said.
Steven Davies and his wife Lyn paid $23,000 for their one-time trip but were disappointed
Australian business watchdog ASIC is awaiting an administrator’s report on whether Luxury Island Escape Cruises NZ was trading while insolvent.
Administrator Dane Skinner said directors could be liable for debt incurred while the company was technically insolvent.
“Based on my research, my best guess is that the company has been insolvent since May 2022 until August 2022 when the ship was arrested by the Federal Court of Australia,” he wrote.